On September 8, 2014, the Federal Trade Commission (FTC) filed a complaint against AbbVie Inc., Besins Healthcare, Inc. and Teva Pharmaceuticals USA, Inc. regarding the pharmaceutical companies' actions surrounding introduction of a generic form of AbbVie's name-brand testosterone drug, AndroGel. The FTC alleged that AbbVie and its partner, Besins, filed separate sham patent infringement lawsuits against Teva and non-party Perrigo Company to delay Teva and Perrigo's introductions of generic forms of AndroGel to the market. Under the Hatch-Waxman Act, once a patent holder files a lawsuit for patent infringement, a 30-month stay of FDA approval for the generic is automatically triggered, allowing the patent holder to reap 30 months of profit without competition. The FTC alleged that because the challenged generic drugs clearly fell outside the scope of the patent, AbbVie and Besins' patent infringement suits were a sham filed only to trigger the 30-month stay.

In response to AbbVie and Besins' lawsuit, Teva and Perrigo filed counterclaims asserting that the infringement claims were baseless. To settle the litigation, AbbVie and Teva entered into a reverse payment settlement where AbbVie supplied Teva with a generic form of a cholesterol drug (with $1 billion in annual US sales) to sell in exchange for Teva delaying introduction of its generic form of AndroGel. The FTC alleged that the pay-for-delay settlement:

The FTC's complaint states that because of a 2011 consent order between the FTC and Perrigo, AbbVie was not able to enter into a pay-for-delay agreement with Perrigo. Perrigo eventually settled its litigation with AbbVie. That settlement is not part of the FTC's complaint.

The FTC alleged that the sham patent litigations constituted monopolization and that the reverse payment settlement was an illegal restraint of trade, all in violation of Section 5 of the FTC Act.

In remarks on September 8, 2014, FTC Chairwoman Edith Ramirez explained that the FTC will continue to pursue anticompetitive pay-for-delay agreements, which the FTC alleges cost consumers hundreds of millions of dollars. For more information on the FTC's pursuit of anticompetitive pay-for-delay agreements, specifically with regard to the landmark case FTC v. Actavis, see Legal Updates, Supreme Court Issues Decision in Pay-for-Delay Case FTC v. Actavis, District of New Jersey Holds that Actavis Applies Only to Monetary Reverse Payment Settlements, Federal Judge Holds that Actavis Is Not Limited to Cash Payment Settlements and Cash Only: Federal Judge Holds that Actavis is Limited to Monetary Settlement Payments.